Boulder, Broomfield counties see largest metro rent increases in 2013

Area also shows lowest vacancy rates at 3.4 percent

By Megan Quinn

Camera Staff Writer

Posted:
03/01/2014 08:00:00 PM MST

The Harvest Station apartments, seen through the Commerce Street Bridge, are among a number of new projects under construction or in the planning stages that will add to Broomfield's housing inventory. (DAVID R JENNINGS / Broomfield Enterprise)

Rent, vacancy rate stats

More info: To learn more about trends in the Denver housing market, and to see estimates for rental and vacancy rates in the Boulder/Broomfield area, visit divisionofhousing.com and click "Vacancy and Rent Surveys."

Broomfield and Boulder counties saw the largest rent increase in the Denver-metro area last year, and local vacancy rates continued to decrease even as new multi-family housing units are being built.

Rental rates in the Broomfield area went up by about $95 since last year, according to a recent report by the Colorado Division of Housing and the Apartment Association of Metro Denver. And while vacancy rates rose in most other metro-area counties, the Broomfield/Boulder area saw vacancy rates fall from 3.7 to 3.4 percent, the lowest in the metro area, according to the report.

Since last year, Boulder County overall, excluding Broomfield data, has seen vacancy rates increase .3 percent.

Excluding university areas, Boulder's vacancy rates are up 2 percent. Factoring those university areas back in, vacancy rates are down .2 percent with the current projection at 0 percent vacancies.

Though the Broomfield-Boulder area saw the largest rent increases and lowest vacancy rates, it is not the only area seeing rent increases. Denver County saw the second-highest rent increase, which grew by 8.1 percent. The metro-Denver area saw average rent go up by $63 in 2013 compared to the previous year, from $978 to $1,041, according to the Division of Housing report.

Broomfield residents on average are paying about 8.6 percent more for rent this year, going from an average of $1,103 to an average of $1,198, according to the report.

High rents, low availability

"Broomfield is a desirable location, and people are moving to the area for employment and all the rest," said Cheryl St. Clair, Broomfield Housing Program manager.

Those circumstances could be putting the squeeze on some people looking to call the city home, continuing a trend identified in a 2012 report. Affordable housing is a challenge for many single parents and lower-income families, according to Broomfield Community Foundation. The Foundation's 2012 Sweep Report, a summary of Broomfield's demographics and services, identified the need for more affordable housing as a priority.

Karen Smith, executive director of the Foundation, said many of the nonprofit organizations the Foundation provides funding to are still seeing their clients struggle to afford rents in Broomfield.

"I know that the problem still exists," she said.

The Foundation has formed a working group to explore ways to create more affordable housing options in Broomfield, but right now those ideas are in the brainstorming and research stages, she said.

St. Clair said there is no hard and fast rule for what can be considered "affordable."One typical measurement of housing affordability is if housing costs are less than 30 percent of a family's income, she said.

Using that formula, to be able to afford the average monthly rent of $1,198, an individual or family would have to net nearly $3,600 a month. When taking income taxes and other paycheck deductions into consideration, a person would need to make roughly $50,000 per year to afford that rent.

New units on the way

The Division of Housing report shows that while rents are going up in every metro-area county, so, too, are vacancies, because of new housing construction, said Ryan McMaken, an economist with the division. The exception is Broomfield.

In the Denver-metro area as a whole, the apartment vacancy rate increased to 5.2 percent during the fourth quarter of 2013, the highest in two years, the report stated.

While it's not clear why there are so few vacancies in Broomfield, St. Clair said the September floods, which impacted neighboring communities, might have contributed to a higher demand for apartments.

People also continue to move to Broomfield to take jobs in the area, she said.

The city will see as many as to 2,068 units, some of which are available now, with more available in the next year, according to a list of new and proposed construction projects provided by Broomfield staff.

The majority of new projects will be rental units, including condos, townhomes and apartment buildings, said Dave Shinneman, Broomfield Community Development director.

Three projects on Broomfield's list have been completed, including two Vantage Point buildings in the Via Varra area and the Arista Place apartments near the 1stBank Center, which add 376 new rental units.

There are nine more projects under construction, including Harvest Station, a group of 13 three-story apartment buildings off Wadsworth Boulevard, according to the list.

An additional seven projects have either been approved or are under review, which could add another 1,264 units if plans move forward.

And Broomfield could approve more projects over time, Shinneman said.

The most recently approved project is a group of 49 duplex buildings in North Park in northern Broomfield. City Council approved the project at its Feb. 18 meeting.

Mark Williams, executive vice president of the Apartment Association of Metro Denver, said new housing units are being approved and built throughout the metro area.

"The industry still sees relevant pent up demand out there," he said in an email.

Will inventory drop prices?

An increase in rental units from new construction could drive down rental costs in older units in Broomfield, St. Clair said, but it's a wait-and-see game when finding out how the market will actually shake out in the next year.

"Historically, we see older buildings reduce their rents (when new buildings are built), but we haven't seen that yet," she said.

If that happens over time, "we could see a bigger range of rental choices and affordability," she said.

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